Inside the Conservative party conference: flooding at the fringe

Recently appointed flood minister Richard Benyon admitted that flooding wasn’t his specialist subject when he appeared at the ABI’s flooding fringe event at the Conservative party conference earlier this week.

He explained that while he had covered the rest of his environment portfolio while in opposition, he had not been responsible for flooding issues.

However, this is the man who will have the leading hand over the next two years in piloting the government’s flooding policy.

Top of his agenda in this respect will be how to deal with flood insurance post-2013, when the statement of principles - the agreement under which insurers have agreed to extend standard cover to flood-prone areas in return for a government promise of a long-term strategy to tackle the issue - comes to an end.

'An absolute priority'

Benyon expressed his alarm at the prospect that insurance cover could be withdrawn from flood-prone areas when speaking at the ABI event about his Newbury constituency, which was hit by the 2007 floods.

“What will happen to those communities in 10 or 20 years? Are we going to see communities devastated because of the inability to get insurance?” he asked. “I want insurance cover for flooding to remain in the widest sense as possible.”

Aviva director of claims Dominic Clayden had told another conference fringe session, which took place on the previous evening, that it was “undoubtedly essential” that investment on flood defences was not just maintained but increased. He pointed out that the last 10 years had seen around £5bn worth of losses as a result of flood damage.

As reported in this week’s Insurance Times, Benyon hinted that there was top-level commitment within the government for funding flood defence. He said “(Flood defence funding) is in our coalition agreement as an absolute priority. We continue to make this an absolute priority, and this is understood at the highest level of government.”

But, equally, he said that there wouldn’t be a blank cheque with his comments.

No easy answers

Andy Sawford, chief executive of the Local Government Information Unit thinktank, warned the meeting that it was politically unrealistic to expect the government to fully fund the flood protection bill.

“If you think of the context of the public sector financial challenge that we face, I don’t fancy our chances of finding £20bn for flooding," he said. “Although it affects some areas of the country, it doesn’t affect everybody at the same time. It’s not a huge political priority.”

Environment select committee chair Anne McIntosh, who chaired the previous evening’s Aviva event at which Clayden had been speaking, highlighted the party political tensions that the localised nature of flooding issues might cause for the coalition government.

Highlighting the concentration of flood-prone Liberal Democrat-held constituencies in the South West, she said: “This is one of the biggest challenges that we are going to face.”

Public-private initiative

These potential political tensions point the way towards greater risk sharing between the government and other stakeholders, including councils and local communities. A working party has been set up to explore the scope for greater risk sharing following last month’s government-sponsored flooding summit.

Benyon was clearly interested in such an approach, which clearly chimes with the government’s ‘Big Society’ initiative to offload public sector responsibilities onto the shoulders of the voluntary and private sectors.

“What matters is that local people are able to take some sense of ownership of the problem,” he said, adding that local authorities could increase the local level of council tax to help fund defences.

As the 2013 deadline edges ever closer, the insurance industry will be tracking Benyon’s learning curve with interest.